TORONTO, ONTARIO--(Marketwired - Jan. 23, 2014) - According to the second annual BMO Household Savings Report released today, Canadians saved an average of $8,764 last year. As well, many are setting their sights higher for 2014, with Canadians planning to set aside an average of $9,635 in the year ahead.
The report, conducted by Pollara, revealed:
- 2013 marked a significant drop in the percentage of Canadians who did not save anything, from 28 per cent in 2012 to 17 per cent in 2013, meaning more Canadians are saving a portion of their income
- The most common barriers for Canadians for meeting their savings goals include insufficient income to save (69 per cent), followed by high expenses (67 per cent) and management of debt (50 per cent)
- Canadians plan to save an average of $9,635 in 2014, with the majority using a chequing account or Registered Retirement Savings Plan (RRSP) (66 per cent and 55 per cent, respectively)
- Half (47 per cent) will use a Tax Free Savings Account (TFSA), while one-third (31 per cent) will use a high-interest savings account.
According to BMO Economics, the most recent official data show Canadians were able to set aside more in 2013 than the year prior, and forecast that Canadians will maintain the pace in 2014.
"Canadians increased their savings last year in response to higher long-term interest rates and with one eye on elevated debt," said Sal Guatieri, Senior Economist, BMO Capital Markets. "We expect the saving rate to remain above 5 per cent in 2014, as households are borrowing at the slowest rate in three decades and long-term interest rates are likely to drift higher due to a stronger economy and a reduction in Federal Reserve stimulus."
"Canadians appear to be setting their savings sights higher in 2014, which is encouraging. However, it's apparent that various factors, such as high expenses and debt, could prevent them from meeting their savings goals," said Christine Canning, Head of Everyday Banking, BMO Bank of Montreal. "With these barriers in mind, we advise those who are falling short to take simple steps, such as putting aside smaller amounts in a separate account and using automatic payments in order to get started."
Ms. Canning added that even the smallest of contributions today can end up making a big difference long-term.
Savings Goals for 2014
The report also identified the most common savings goals among Canadians:
- Saving for a vacation was identified as the top priority for 2014 (48 per cent)
- Building a rainy day/emergency fund ranked second for the year ahead (43 per cent), with retirement savings coming in third (39 per cent).
Personal Savings By Region and Gender
The report also explored personal saving differences across regions and between genders, and found:
- British Columbians expect to save the most in 2014 ($15,117), followed by Albertans ($12,478)
- Quebeckers plan on saving the least ($6,179)
- Men plan, on average, to save $11,228 in 2014, whereas women plan to save an average of $7,989.
|Amount Saved in 2013
|Planned Savings for 2014
For more information about how BMO can help make saving more affordable, stop by a BMO branch today or click here.
The Pollara survey was completed between January 10th and 14th, 2014, with an online sample of 1,002 Canadians. A probability sample of this size would yield results accurate to ± 3.1 per cent, 19 times out of 20.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $537 billion as at October 31, 2013, and more than 45,000 employees, BMO Financial Group provides a broad range of personal and commercial banking, wealth management and investment banking products and solutions.